Daily Energy Report

Attacks on Houthis, US miles driven, China crude imports, EU CO2 removal, Alberta oil production at record high, German farmer protests, EU wind expands, China coal imports, and more.

A F Alhajji

Jan 12, 2024

∙ Paid

We are posting a 30-minute recording on the impact of the attacks on Houthis on the Oil and LNG industries:

https://x.com/anasalhajji/status/1745839951940333730?s=20

https://twitter.com/i/spaces/1OdKrjQQMRzKX?s=20

Chart of the Day: US Miles Traveled are Near a Record High but Gasoline Consumption Remains Low

Summary

Figure (1) above shows the correlation between miles traveled and gasoline consumption in the US. The Federal Highway Administration released the data for November yesterday. It showed that miles traveled in the first 11 months of 2023 where near a record high. The record was set in 2019. However, adding December data and usual revisions might make miles traveled in 2023 the highest on record.

EOA’s Main Takeaways

At issue here is the increasing gap between miles traveled and gasoline consumption. An increasing number of electric vehicles does not explain it. Improvement in fuel economy does not explain it, especially that the move from small cars to SUVs and light trucks made the average fuel economy flat in recent years. We see the same issue with diesel, but the gap with diesel started in 2006. Possible explanations include the spread of ride-hailing services, Amazon, and home delivery. Most of those cars move within a small area and pass a data collection point several times a day. In a similar manner, increased services and shopping malls in the suburbs lead to shorter trips. Additional variables include the sharp decline in gasoline and diesel prices from 2022 and low employment. In other words, the estimates depend on these variables but in reality it did not happen. To put a sharper point on it, estimates of miles traveled are exaggerated.

Story of the Day

We share with you what we sent our clients last night. We added the text in the box and the chart. As we predicted, oil prices increased above $80/b, but that was short lived.